Question
Need Clarification on the below questions to make sure I am right on track. Thanks. 1. When interested in the rate of return performance of
Need Clarification on the below questions to make sure I am right on track. Thanks.
1.When interested in the rate of return performance of an investment over time it is best to use:
A.The arithmetic mean.
B.The geometric mean.
C.Either the arithmetic mean or the geometric mean.
D.Neither the arithmetic mean nor the geometric mean.
I think its A.
2.Which of the following is not an assumption of Modern Portfolio Theory?
A.Investors are risk averse.
B.Investors are rational decision makers.
C.Risk comes from not knowing what you are doing.
D.Investors' preferences are based on a portfolio's expected return and risk.
3.An investor throwing darts at the NYSE stock listings in the newspaper to select stocks to invest in is an example of:
A.Unique risk.
B.Efficient portfolio
C.Portfolio management
D.Random diversification.
I think its A.
4.Which of the following would not be an example of random diversification?
A.Throwing darts at the stock listings to select a portfolio of stocks.
B.Purchasing whichever stocks were recommended by the expert on a financial program.
C.Stocks selected from asking all of your friends their favorite stock and then putting together a portfolio from them.
D.A portfolio recommended by your financial planner, which includes a variety of different investments and stocks from various industries, countries, and company sizes.
Is it D.
5.Which of the following would be considered risk averse?
A.Sky diving
B.Playing the lottery
C.Gambling in Las Vegas
D.Purchasing health insurance
Is it A.
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